Argentina’s May PP prices roll over on soft demand, steady currency

09 May 2014 20:49 Source:ICIS News

HOUSTON (ICIS)--Argentina’s polypropylene (PP) producers are keeping prices steady in May on soft demand and currency stability, buyer sources said on Friday.

The devaluation of the currency experienced at the end of January produced steep price increases in the following months, as producers reacted to recover lost margins.

The January devaluation was nearly 25%, and PP prices have already climbed that amount.

The currency has stabilised at Ps8.00 per US dollar and has remained steady at that level for the past 6-8 weeks.

But credit has been affected for the whole country and that aspect has not improved.

Demand for big ticket items such as domestic appliances is down because credit cards and banks have shortened credit terms.

Some sectors report a decline in sales of 25-30% compared with the same month of the previous year.

The automotive industry is one of the most affected and could soon bring a wave of layoffs if auto sales remain down.

Currently, homopolymer PP prices in Argentina are at $2,249-2,305/tonne for raffia, while injection material is in the range of $2,276-2,372/tonne, according to ICIS data.

The main PP producers in Argentina are Petroquimica de Cuyo and Petroquimica Ensenada (Petroken).

By George Martin